Suitors make pitch to Hydro-Air

Economic-development leaders in both the suburbs and Buffalo are courting a Hamburg company for a potential project that could see the company nearly triple its local presence.

But they aren't alone.

York, Pa., and Charlotte, N.C., have offered incentive packages to lure the company, Hydro-Air Components Inc. And many in local economic-development circles fear that the home-grown company could bolt from Western New York and head for points elsewhere. Hydro-Air officials were slated to be in North Carolina Feb. 16 and 17 to meet with economic-development officials there, sources said.

Part of the reason, according to Rep. Brian Higgins, D-Buffalo, is what the company feels is a slow response from local economic-development agencies. Area economic-development officials dispute Higgins' claims, citing meetings and correspondence they've had with the company dating to last summer.

"Why is it that it wasn't until Friday (Feb. 10) that I was made aware of this stuff?" Higgins asked. "Can we see this through? We might be able to."

At risk is Hydro-Air's current workforce - which Higgins tabs at 140 - plus another 200 jobs it is expected to create in the next two years. The company's operations will jump from 80,000 square feet to 250,000, making it one of the most attractive expansion projects in the pipeline locally.

"It's very competitive out there," Higgins said. "We can't be playing around with this stuff."

Hydro-Air officials did not respond to repeated requests for comment.

Economic-development officials say they've been working with Hydro-Air since last summer and have put together an incentive package that could top $4 million, depending on what location in the Buffalo Niagara region - if any - the company chooses.

Hamburg, West Seneca, Orchard Park and Buffalo are all vying to host the company.

Higgins spent several hours with Buffalo Mayor Byron Brown and his economic-development team on Feb. 12 - a Sunday - looking at options and incentives for bringing the company to Buffalo.

Sites along South Park Avenue and the Buffalo Lakeside Commerce Park are being pushed by the city. A Buffalo site would come with additional incentives under such initiatives as the Community Renewal program, which offers perks to companies that retain or create jobs in distressed regions.

"I just want them to stay in Western New York," Higgins said. "Whether it's Buffalo or Hamburg is less important to me than is the urgency to keep this company and those jobs in this region."

Sources said Hydro-Air's decision may rest ultimately with a long-term contract the company is seeking from Carrier Corp. to serve as a subcontractor on some heating and air-conditioning projects. Landing that contract may help swing the deal in the region's favor.

Hydro-Air supplies heating and cooling components for commercial, industrial and institutional uses. It has an international client base that includes buyers in South Korea and China.

The company operates from a former Gold Circle store on Camp Road in Hamburg. Hydro-Air's lease for the 80,000-square-foot building expires this year, and the company has been scouting for a 250,000-square-foot facility to lease. Hydro-Air needs to be in the new building by March 2007.

Sources say the company prefers to lease rather than own its facility.

Hydro-Air appears to have a close working relationship with the Hamburg Industrial Development Agency, which has helped the company with previous expansions.

Michael Bartlett, IDA executive director, confirmed that Hamburg's package includes a specialized payment-in-lieu-of-taxes offer that could save the company more than $1.2 million in taxes during the next 15 years.

"The town has stepped forward in a very substantial way," Bartlett said.

Empire State Development Corp. in early December offered the company a $700,000 incentive package and has offered to work with Hydro-Air on a series of Empire Zone tax credits that could reduce its development costs by 15 percent.

"We're serious about keeping them here. Very serious," added Tim Doolittle, Empire State Development regional vice president and general manager.

Kathy Hochul, a Hamburg town board member and liaison to the IDA, said town leaders have been aggressive in meeting Hydro-Air's demands.

"The Town of Hamburg has bent over backwards to get them to stay," Hochul said. "This is a firm that has good-paying jobs and wants to create more good-paying jobs. This is exactly the type of business and jobs that we want to keep in our own hometown."

"This is what the BNE (Buffalo Niagara Enterprise) and the ECIDA (Erie County Industrial Development Agency) are supposed to be doing, and they're not," Higgins said.

Hochul - among others - disputes Higgins' claim that contact between Hydro-Air and the economic-development community has been limited.

"We've had countless outreach opportunities with them," she said.

The Buffalo Niagara Enterprise has been working with the company since last summer, said Thomas Kucharski, BNE president. So has the Erie County Industrial Development Agency and Empire State Development Corp.

All of the agencies presented an offer to Hydro-Air in early December and followed that up with a new, tweaked offer just after New Year's.

Higgins and others remain confident that they will convince Hydro-Air to remain in the region, especially if the company lands the Carrier contract.